New Magellan boss committed to Barrenjoey stake

“This is a much trickier time to be an investor,” he said with reference to higher inflation, de-globalisation and rising geopolitical risks.

“That pushes costs around for companies, that pushes cash flows and profitability around … there’ll be winners and losers out of that – and ultimately, that’s the business we’re in”.

The changes will see the dominance of Magellan’s global equities division diminish as it diversified into areas like private markets.

George is confident that the business is already stabilising.

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“I am confident that we can see funds under management building again,” he said. “Again, these are driven by things like performance and how we connect and communicate with our clients”.

Jarden’s Elizabeth Miliatis is currently forecasting that Magellan will have just $45 billion worth of funds under management by December 2027 with outflows to continue in the near term and says the target $100 billion appears to be a stretch.

“Without a material improvement in the existing business near term, we estimate Magellan will likely fall short of this target even if all available capital is deployed for acquisitions,” she said.

“Further, with multiple rating agencies freshly downgrading many of MFG’s funds, we expect retail outflows to remain elevated near term.“

Morningstar is the latest agency to put the various Magellan funds under review. Last week, it said the latest reshuffle in leadership “reduces our conviction in this highly concentrated strategy.”

Jarden has a target price of $7.75 on Magellan and an Underperform recommendation. Magellan shares closed at $10.01 on Friday, just short of multi-year lows.

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